New Delhi, Jan 17: The Union Cabinet today approved the decision to raise cap on subsidized LPG cylinders from six to nine, effective from April, 2013, petroleum minister Veerappa Moily announced.
The cabinet also decided to leave fixation of diesel price to the oil companies.
Presently, the oil companies are incurring Rs 9.03 loss per litre, indicating that an imminent diesel price hike effective tonight is on the cards.
No decision was taken about hiking kerosene price at today's cabinet meeting.
The political approval to take the proposals to the cabinet came on Tuesday after Congress leaders decided the LPG cap issue and price increases be sorted out before the party's Chintan Shivir starting Friday in Jaipur and the AICC session on Sunday to avoid the wrath of delegates opposed to the ceiling of six subsidized cylinders per year per household.
The Jaipur session will debate the Congress Working Committee's document detailing the future course of action and pass a declaration to guide the party through this year's assembly elections and Lok Sabha polls in 2014.
Petroleum Minister Veerappa Moily's proposal had recommended raising the cap to nine subsidized cylinders with a price increase of Rs 130 per cylinder, or doubling it to 12, provided cylinder prices are raised by Rs 50 every quarter from April 2013 until the entire subsidy is eliminated. But the details are yet to be made public.
In line with the Kelkar Committee report, it seeks an immediate increase of Rs 4.50 per litre of diesel and a one rupee increase every month thereafter until the under-recovery on diesel is wiped out.
However, it also gives a softer option where diesel price could be raised by 60 paise a month until the under-recovery is eliminated, and its price is deregulated.
On kerosene, the increase suggested was either 35 paise a litre each month or one rupee a litre every quarter until March 2015, but this was deferred considering political compulsions.
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